Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 110801 December 8, 1995

MARIKINA VALLEY DEVELOPMENT CORPORATION, ISIDORO LIAMZON, JR., SPS.

BERNARDO AND DELIA ROSARIO, SPS. MANUEL AND NORMA SANCHEZ, SPS. RUFINO
AND MILAGROS JAVIER, SPS. RODOLFO AND SONIA OCAMPO, SPS. LAZARO AND
JULIETA SANTOS, SPS. TEODORO AND ZENAIDA BAUTISTA, SPS. CHARLES AND MA.
CORAZON MILLER, SPS. EDGARDO AND CRISTINA VALENZUELA, FRANCISCO LIAMZON,
MARIETTA LIAMZON, ROMEO THADEUS LIAMZON, MICHAEL RAYMOND LIAMZON,
ROBERTO ANTONIO LIAMZON, ROSABELLE THERESA LIAMZON, RONALDO ISIDORO
LIAMZON and RODRIGO JESUS LIAMZON, petitioners,
vs.
HON. NAPOLEON R. FLOJO, Presiding Judge of Branch 2, RTC Manila; BASILIO SYTANGCO,
as representative of the heirs of JOSE REYES SYTANGCO; and THE HON. COURT OF
APPEALS, respondents.

FELICIANO, J.:

Jose Reyes Sytangco instituted a complaint for reconveyance of a piece of land situated along
España Street, Manila, against petitioner Marikina Valley Development Corporation ("Marikina
Valley") and Milagros Liamzon. In his complaint, Jose Reyes Sytangco alleged that he and his wife,
Aurelia Liamzon-Sytangco had entrusted some funds to Milagros Liamzon, sister-in-law of Aurelia, in
order to purchase the España Street property from its former owners. The Sytangco spouses had
years ago built their house on that parcel of land then leased from the original owners with whom
they negotiated for purchase of that land. Milagros Liamzon, however, in alleged violation of the trust
reposed upon her, purchased the España Street property in her own name and had title to the same
registered in her name. Thereafter, she transferred title over that property to petitioner Marikina
Valley, a closed corporation owned by the Liamzon family.

In their answer, petitioner denied the allegations of Jose Reyes Sytangco and claimed that Milagros
Liamzon had purchased the España Street property by and for herself, with funds coming from
petitioner Marikina Valley. For her part, Milagros Liamzon insisted, among other things, that the
Reyes Sytangco spouses had waived in her favor their right to buy the property in question.

During the trial in the court below, Jose Reyes Sytangco died and he was substituted by his heirs,
who are private respondents herein. After trial, the trial court ruled in favor of private respondent
heirs in a decision dated 11 October 1991. The trial court directed petitioner Marikina Valley to
execute a Deed of Conveyance covering the property involved in favor of private respondents.

On 28 October 1991, Marikina Valley and the other petitioners — heirs of Milagros Liamzon
(Milagros having, in the meantime, passed away) — received a copy of the decision of the trial court.
Petitioners moved for reconsideration on 7 November 1991.
The Reyes Sytangco heirs opposed petitioners' motion for reconsideration upon the ground that it
was a pro forma one. The heirs contended that the allegations of insufficiency of evidence were
couched in very general terms, contrary to the requirements of Section 2, Rule 37 of the Rules of
Court.

On 21 November 1991, the trial court denied petitioners' motion for reconsideration for lack of merit.
The trial court said:

The defendant anchors his motion on the assertion that:

1. There is no sufficient evidence to show that the down payment for the property
came from the plaintiff;

2. That the money used for the property did not come from the plaintiff, hence, no
implied trust could have been created between Milagros Liamzon and Aurelia
Liamson;

3. That piercing the veil of corporate entity is not applicable to this case.

After a perusal of the arguments posed in support of these grounds, the court finds
that these arguments had been discussed and resolved in the decision. There being
[no] other matter of consequences asserted which has not been considered in the
decision, the Court resolves to deny the same.

WHEREFORE, the Motion for Reconsideration is DENIED for lack of

merit.1 (Emphasis supplied)

Petitioners received a copy of the above order on 22 November 1991. On 25 November

1991, they filed a notice of appeal with the trial court.

In the meantime, private respondent heirs moved for execution of the decision of 11 October 1991.
They insisted that petitioners had failed to perfect an appeal within the reglementary period.

In its order dated 25 November 1991, the trial court dismissed the notice of appeal filed by
petitioners for having been filed beyond the reglementary period to perfect an appeal. The trial judge
reasoned that petitioners' motion for reconsideration was pro forma and hence did not stop the
running of the reglementary period. Thereupon, the trial judge granted private respondents' motions
for execution.

Petitioners went to the Court of Appeals on certiorari and injunction. They denied that their motion
for reconsideration was merely pro forma and claimed that they had filed their notice of appeal
seasonably. They also challenged the validity of subsequent orders of the trial court directing
execution.

The Court of Appeals dismissed the petition, declaring that petitioners' motion for reconsideration
was indeed pro forma and, "therefore, clearly without merit." The appellate court went on to say that:

[w]here a motion for reconsideration merely submits, reiterates, repleads, repeats, or

reaffirms the same arguments that had been previously considered and resolved in
the decision, it is pro forma.
 The Court of Appeals concluded that petitioners' pro forma motion for reconsideration had
not stopped the running of the period to perfect an appeal and that, accordingly, the
judgment had become final and private respondents were entitled to execution as a matter of
right. Petitioners sought reconsideration of the Court of Appeals' decision, without success.

In their present Petition for Review on Certiorari, petitioners aver once more that their motion for
reconsideration filed before the trial court was sufficient in form and substance and was not pro
forma. They reiterate that their motion had effectively suspended the running of the reglementary
period, and that their notice of appeal filed three (3) days from receipt of the order denying their
motion for reconsideration had been filed well within the remaining period to perfect an appeal.

The rule in our jurisdiction is that a party aggrieved by a decision of a trial court may move to set
aside the decision and reconsideration thereof may be granted when (a) the judgment had awarded
"excessive damages;" (b) there was "insufficiency of the evidence to justify the decision;" or (c) "the
decision was against the law."2

A motion for reconsideration based on ground (b) or (c) above must

point out specifically the findings and conclusions of the judgment which are not
supported by the evidence or which are contrary to law, making express reference to
the testimonial or documentary evidence or to the provisions of law alleged to be
contrary to such findings and conclusions. 3

A motion for reconsideration, when sufficient in form and substance — that is, when it satisfies the
requirements of Rule 37 of the Rules of Court — interrupts the cunning of the period to perfect an
appeal.4 A motion for reconsideration that does not comply with those requirements will, upon the
other hand, be treated as pro forma intended merely to delay the proceedings and as such, the
motion will not stay or suspend the reglementary period.5The net result will be dismissal of the
appeal for having been unseasonably filed.

The question in every case is, therefore, whether a motion for reconsideration is properly regarded
as having satisfied the requirements, noted above, of Rule 37 of the Rules of Court. As already
pointed out, the Court of Appeals took the position that where a motion for reconsideration merely
"reiterates" or "repleads" the same arguments which had been previously considered and resolved in
the decision sought to be reconsidered, the motion is a pro forma one. In taking this position, the
appellate court quoted at some length from a prior decision of this Court:

. . . Said the Supreme Court in "Dacanay v. Alvendia, et al.," 30 SCRA 31, to wit:

In Estrada v. Sto. Domingo, recently decided by this Court, we once again called the
attention of the bar and litigants to the "principle already forged by this Court . . . that
a motion for reconsideration which has no other purpose than to gain time is pro
forma and does not stop the period of appeal from slipping away." Mr. Justice Dizon
pointed out in his concurring opinion that "The motion aforesaid is pro forma on yet
another ground, in substance it was but a reiteration of reasons and arguments
previously set forth in respondent Sto. Domingo's memorandum submitted to the trial
court and which the latter had already considered, weighed and resolved adversely
to him when it rendered its decision on the merits." And earlier in Lonaria v. De
Guzman, we held that "[T]he filing of the second motion on January 22, 1963 did not
suspend the running of the period, first, because it was " pro forma based on grounds
already existing at the time of the first motion."6 (Emphasis partly in the original and
partly supplied)
It should, however, be noted that the circumstance that a motion for reconsideration deals with the
same issues and arguments posed and resolved by the trial court in its decision does not
necessarily mean that the motion must be characterized as merely pro forma. More than two (2)
decades ago, Mr. Justice J.B.L. Reyes had occasion, in Guerra Enterprises Company, Inc. v. Court
of First Instance of Lanao del Sur,7 to point out that a pleader preparing a motion for reconsideration
must of necessity address the arguments made or accepted by the trial court in its decision:

. . . . Among the ends to which a motion for reconsideration is addressed, one is

precisely to convince the court that its ruling is erroneous and improper, contrary to
the law or the evidence (Rule 37, Section 1, subsection [c]); and in doing so, the
movant has to dwell of necessity upon the issues passed upon by the court. If a
motion for reconsideration may not discuss these issues, the consequence would be
that after a decision is rendered, the losing party would be confined to filing only
motions for reopening and new trial. We find in the Rules of Court no warrant for
ruling to that effect, a ruling that would, in effect eliminate subsection (c) of Section 1
of Rule 37.8 (Emphases supplied)

The movant is very often confined to the amplification or further discussion of the same
issues already passed upon by the trial court. Otherwise, his remedy would not be a
reconsideration of the decision, but a new trial or some other remedy.9

The kinds of motions for reconsideration which have been regarded as merely pro forma are
illustrated by Crisostomo v. Court of Appeals,10 where a one sentence motion for reconsideration,
which read thus:

COMES NOW the petitioners-appellants in the above-entitled case and to this

Honorable Court respectfully move for reconsideration of the decision promulgated
on November 8, 1966, copy of which was received by the undersigned on November
9, 1966, on the ground that the same is contrary to law and evidence. (Emphasis
supplied)

was considered a pro forma motion for total failure to specify the findings or conclusions in
the trial court's decision which were supposedly not supported by evidence or were contrary
to law. Similarly, in Villarica v. Court of
Appeals, 11 a motion for reconsideration which no more than alleged the following:

1. that the order is contrary to law; and

2. that the order is contrary to the facts of the case,

did not suspend the running of the period for appeal, being a pro forma motion merely.
These kinds of motion present no difficulty at all.

A motion for reconsideration which is not as starkly bare as in Crisostomo and in Villarica, but which,
as it were, has some flesh on its bones, may nevertheless be rendered pro forma where the movant
fails to make reference to the testimonial and documentary evidence on record or the provisions of
law said to be contrary to the trial court's conclusions. In other words, the movant is also required to
point out succinctly why reconsideration is warranted. In Luzon Stevedoring Company v. Court of
Industrial Relations, 12 the Supreme Court declared that:

it is not enough that a motion for reconsideration should state what part of the
decision is contrary to law or the evidence; it should also point out why it is
 so. Failure to explain why will render the motion for reconsideration pro forma.
(Emphasis supplied)

Where a substantial bonafide effort is made to explain where and why the trial court should
be regarded as having erred in its main decision, the fact that the trial court thereafter found
such argument unmeritorious or as inadequate to warrant modification or reversal of the
main decision, does not, of course, mean that the motion for reconsideration should have
been regarded, or was properly regarded, as merely pro forma.

It is important to note that the above case law rests upon the principle that a motion for
reconsideration which fails to comply with the requirements of Sections 1 (c) and 2 of Rule 37 of the
Rules of Court, and is therefore pro forma merely, has no other purpose than to gain time. It is
intended to delay or impede the progress of proceedings and the rule that such motion for
reconsideration does not stop the period of appeal from "slipping away" reflects both poetic and
substantial justice. In Estrada, et al. v. Sto. Domingo, et al., 13 the Court underlined.

[T]he principle [previously] forged by this Court — that a motion for

reconsideration which has no other purpose than to gain time is pro forma and does
not stop the period of appeal from slipping away. It is in recognition of this
doctrine that we hold that where a motion for reconsideration in an election case is
taken advantage of for purposes of delay to the prejudice of the adverse party
or where such motion forms part of a matrix delay, that motion does not stop running
of the five-day period for appeal. 14(Emphasis supplied)

Where the circumstances of a case do not show an intent on the part of the movant merely to delay
the proceedings, our Court has refused to characterize the motion as simply pro forma. Thus, in
the Guerra Enterprises case, the Court took note of the fact that the motion for reconsideration had
been filed within barely twelve (12) days (the reglementary period was then thirty [30] days) after
receipt by the counsel for the movant party, which fact negated the suggestion that the motion had
been used as "a mere delaying tactic." 15 Dacanay v. Alvendia, 16 on which the Court of Appeals had
relied, is not in fact in conflict with the cases we have above referred to. In Dacanay, the motion for
reconsideration was in effect a fourth motion for reconsideration: the "reasons and arguments" set
out in the motion for reconsideration had on three previous occasions been presented to the trial
court and each time considered and rejected by the trial court. In Lonario v. De Guzman, 17 the
motion for reconsideration which the Court characterized as pro forma was in fact a second
motion for reconsideration based on grounds already existing at the time the first motion for
reconsideration was filed. Further, at the time of the filing of the second motion, the period to appeal
had already lapsed. This Court dismissed the case for having been appealed beyond the
reglementary period. In Samudio v. Municipality of Gainza, Camarines Sur, 18 the Court had before it
a "so-called motion for new trial based exactly on the very ground alleged in [defendant's] first
motion for reconsideration dated October 17, 1952" and accordingly, held that the motion for new
trial did not suspend the period for perfecting an appeal "because it [was] mere repetition of the [first]
motion for reconsideration of October 17, 1952." 19 (Emphasis supplied)

We turn then to the application of the above standards to the motion for reconsideration in the case
at bar. The text of petitioners' motion for reconsideration dated 7 November 1991 is quoted below:

(a) There [was] no sufficient evidence introduced to prove the alleged fact that the
down-payment for the property in question came from Jose Sytangco. Private
transactions are presumed to be fair and regular (citations omitted). The regularity of
defendant Liamzon's transaction with the Prietos for the sale of the property implies
 that the consideration came from her and not from plaintiff. This presumption cannot
be rebutted by the bare testimony of abiased witness;

(b) The money used to pay for the property not belonging to the plaintiff, there could
never be a trust between him and defendant Liamzon. Even then, plaintiff merely
claimed that what belong to him was only the down-payment, not the total amount
used to purchase the property, that the defendant Liamzon was the one paying the
installments can be gleaned from the fact that while plaintiff allegedly authorized
defendant Liamzon to purchase the property sometime in 1968, it was only in 1981
that he came to know that the property was titled in the name of defendant
corporation. Plaintiff's (Jose Reyes Sytangco) total lack of knowledge about the
transactions regarding the property for 13 long years, meant that he had no contract
with the Prietos, the seller during this period. Assuming without admitting that the
down-payment belonged to plaintiff, he is only entitled to reimbursement but not title
to the property;

(c) Piercing the veil of corporate fiction applies only to cases where the corporation
was created for purposes of fraud, usually in tax cases; fraud, however, being the
exception rather than the rule should be proven by convincing evidences. That
defendant Liamzon is a director of defendant Corporation is not indicative of fraud.
The money used to buy the property being advances from defendant corporation,
there is nothing wrong to have said property be titled in the name of the corporation
to offset said advances;

(d) It may be mentioned that the ejectment counterpart of this case had already been
decided with finality in favor of defendant corporation. 20

In paragraph (a) of their motion, petitioners claimed that the evidence submitted was insufficient to
show that the downpayment for the purchase of the España Street property had in fact come from
private respondents' predecessor-in-interest Jose Reyes Sytangco. In effect, petitioners here aver
that the presumption of regularity of private transactions carried out in the ordinary course of
business had not been overturned by the testimony of Jose Reyes Sytangco himself. This reflected
petitioners' appraisal of the trial court's conclusion that Jose and Aurelia Reyes Sytangco had
handed over to Milagros Liamzon the amount of P41,000.00 to complete the downpayment of the
Reyes Sytangco spouses on the España lot. The trial court had not discussed the presumption of
regularity of private transactions invoked by petitioners.

In paragraph (b) of their motion, petitioners, building upon their paragraph (a), argued that since the
money used to pay the property did not belong to the plaintiff, no constructive trust arose between
Jose Reyes Sytangco and Milagros Liamzon. Petitioners further argue that assuming that the money
for the downpayment had really come from the Reyes Sytangco spouses, the rest of the payments
on the España property had been made by Milagros Liamzon. Accordingly, they argue that the
Reyes Sytangco spouses would be entitled only to reimbursement of the downpayment and not to
reconveyance of the property itself. The trial court had not addressed this argument in its decision;
the trial judge had found Milagros Liamzon's testimony concerning whose money had been used in
the purchase of the lot as "filled with contradictions" which seriously impaired her credibility. 21

The third argument of petitioners in their motion assailed the reliance of the trial court upon the
doctrine of piercing the corporate veil by asserting that that doctrine was available only in cases
where the corporation itself had been created for purposes of fraud. Implicitly, petitioners argue that
no evidence had been submitted to show that Marikina Valley had been created precisely "for
purposes of fraud." The trial court had not touched on this argument. In paragraph (d) of their
motion, petitioners aver that the ejectment suit instituted by them had been decided in their favor.
The trial court's decision had not mentioned such an ejectment suit.

We are, therefore, unable to characterize the motion for reconsideration filed by petitioners as
simply pro forma. That motion for reconsideration, it may be noted, had been filed no more than ten
(10) days after receipt of the trial court's decision by petitioner Marikina Valley.

It is scarcely necessary to add that our conclusion that petitioners' motion was not pro forma,
should not be regarded as implying however indirectly that that motion was meritorious.

We note finally that because the doctrine relating to pro forma motions for reconsideration impacts
upon the reality and substance of the statutory right of appeal, that doctrine should be applied
reasonably, rather than literally. The right to appeal, where it exists, is an important and valuable
right. Public policy would be better served by according the appellate court an effective opportunity
to review the decision of the trial court on the merits, rather than by aborting the right to appeal by a
literal application of the procedural rule relating to pro forma motions for reconsideration.

WHEREFORE, for all the foregoing, (a) the Orders of the trial court dated 27 November 1991, 12
December 1991 and 22 January 1992 and (b) the Decision of the Court of Appeals dated 8
December 1992, are hereby REVERSED and SET ASIDE. The case is REMANDED to the trial court
which is hereby DIRECTED to GIVE DUE COURSE to petitioners' notice of appeal. No
pronouncement as to costs.

SO ORDERED.

Narvasa, C.J., Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan,
Mendoza, Francisco, Hermosisima, Jr. and Panganiban, JJ., concur.

Footnotes

1 Rollo, p. 53.

2 Section 1 (c), Rule 37, Rules of Court.

3 Section 2, third paragraph, Rule 37, Rules of Court.

4 Section 3, Rule 41, Rules of Court.

5 E.g., Nieto v. De los Angeles, 109 SCRA 229 (1981); City of Cebu v. Mendoza, 62
SCRA 440 (1975); Alvero v. De la Rosa, 76 Phil. 428 (1946); Reyes v. Court of
Appeals, 74 Phil. 235 (1943).

6 Court of Appeals Decision, p. 10; Rollo, p. 126.

7 32 SCRA 314 (1970).

8 32 SCRA at 317.

9 Siy v. Court of Appeals, 138 SCRA 536 (1985). See also People v. Rodriguez, 213
SCRA 171 (1992).
10 32 SCRA 54 (1970).

11 57 SCRA 24 (1974).

12 8 SCRA 447 (1963). See also Viña v. Court of Appeals, 126 SCRA 371 (1983);
Philippine Advertising Counsellors, Inc. v. Revilla, 52 SCRA 246 (1973); Ylanan v.
Mercado, 94 Phil. 769 (1954).

13 28 SCRA 890 (1969).

14 28 SCRA at 914.

15 32 SCRA at 317.

16 30 SCRA 31 (1969).

17 21 SCRA 349 (1967).

18 100 Phil. 1013 (1957).

19 100 Phil. at 1018.

20 Rollo, pp. 47-48.

21 Trial Court Decision, Rollo, p. 41.